Wednesday, February 19, 2014

For the second year in a row, HPC will sponsor ERP Corp's SAP Controlling conference. We'll be in San Diego on September 22-23 for the event, which we found to offer 100% substance and 0% fluff last year.

ERP Corp has lined up a number of customers to speak about real-world SAP controlling scenarios, including case studies from McCormick, Deere & Co., Eli Lilly, Rockwell Automation, Woodward, and SPX Genfare. Learn more about what's new at Controlling 2014.

We'll update this space as our plans for Controlling 2014 develop over the year. In the meantime, please contact us if you'd like to meet at the event. We look forward to seeing you in San Diego!

We recently wrapped up a project for a customer that was dissatisfied with its process for assessments (allocations) in SAP, which was slow, complicated, and, to put it bluntly, a real computing resource hog. In fact, the legacy assessment cycles took about 36 hours to run, so there was great room for improvement.

HPC proposed to implement a more efficient overhead-centric process that would bring the customer's accounting into line with best practices. Our model was designed to meet all reporting requirements by utilizing costing sheets instead of assessments, thereby simplifying current processes and speeding up the month-end close.

During the course of the project, we advised the customer on substitute forms of CO allocations such as overheads for PTO, benefits, payroll taxes, supervision and engineering, corporate A&G, and stores expenses. We also implemented the conversions necessary to change master data, such as order numbers, to include new costing sheets.

The customer now has fixed overhead rates in place for 2014, and overhead cost pools for supervision, customer services and administration. A new Stores Expense burden is applied to material issues from stock.

Overhead applied to PM orders is based on a composite rate of direct labor, and the customer's job estimating software uses that rate to calculate overhead on capital work orders. All orders now get a fair and equitable proportion of overhead, and overhead is applied in a far more timely manner to work orders. Accounting can run overheads after each payroll process is completed in CATS, to give project managers the most up-to-date view of job costs.

What about the impact on the month-end close? Running January showed a dramatic improvement: the assessment process that used to take 36 hours now finishes in just 30 seconds. And the new overheads run for only 10 minutes. Both human and computing resources are freed up considerably.